The question paper consists of 8 printed page, each of which is identified by the Code Number LUBS5000M

Statistical Tables Graph Paper

LUBS5000M

UNIVERSITY OF LEEDS

January 2010

Examination for the degree of MA Accounting and Finance MSc Banking and Finance MSc International Finance MSc Management MSc International Business QUANTITATIVE METHODS Time allowed 3 hours Answer ALL questions.

Section A (answer ALL questions) Section A carries 20% of the overall marks. 1. It is possible to find the inter-quartile range of a set of data by plotting an ogive and reading off the appropriate values. A. B. True False

2. Two events A and B are not mutually exclusive. This means A. B. C. D. Whether A occurs does not affect the probability that B occurs A and B can occur together The probability of A is one minus the probability of B. A and B cannot occur together

P.T.O.

LUBS5000M

3. The following information is calculated from a grouped frequency table, fx= 391 fx2 = 4181. What is the standard deviation of x? A. B. C. D. 8.71 4.74 22.47 cannot be calculated from the above information

f = 50

4. A random sample of 150 people is asked whether they smoke or not and 30 per cent say that they do. What is the 95% confidence interval for the percentage of the population who say they smoke? A. B. C. D. 22.67% to 37.33% 25% to 35% 27.50% to 32.50% 20.35% to 39.65%

5. The start of an exponential smoothing process with an alpha of 0.2 is as follows: Period Actual Forecast 1 1020 2 940 1020 3 920 1004 4 950 What will be the forecast for period 4? A. B. C. D. 1020.8 966.8 875.4 987.2

6. A life insurance salesman sells on average 2.5 life insurances policies per week. What is the probability that he will sell some policies in a given week? A. B. C. D. 0.9179 0.7627 0.9750 0.0821 P.T.O.

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7. Assuming that the salesman in question 6 works a five day week what would be the probability that he sells one policy each day? A. B. C. D. 0.2044 0.3033 0.3935 0.9179

8. You wish to introduce into a wage regression model a qualitative variable with 2 categories, public sector / private sector, to capture the impact of working in the public sector on wage levels. What is the correct way to do this? A. It can’t be done. B. Include two dummy variables, each coded 0/1, the first where 1 = public sector, 0 = private sector, the second where 1 = private sector, 0 = public sector. C. Include one dummy variable, in which 1 = public sector, 0 = private sector. D. Include one dummy variable, in which 1 = private sector, 0 = public sector.

9. Hospital records show that of patients suffering from a certain disease, 45% make a full recovery. What is the probability that of 6 randomly selected patients, 4 will make a full recovery? A. B. C. D. 0.2553 0.0410 0.6151 0.1861

10. All other things being equal (working on the same sample) for a lower level of confidence we will get a narrower confidence interval? A. True B. False

P.T.O.

LUBS5000M

Section B (answer ALL questions) Section B carries 20% of the overall marks. 1. Use your knowledge of sampling and specifically the standard error of the sample mean to explain why many national market research and political opinion surveys contain 500 to 1000 respondents, no more and no less? (5 marks)

2. What is meant by a correlation coefficient and how we can test whether a correlation coefficient is statistically significant or not? (5 marks) 3. Data on the salaries of two occupations – financial management and solicitors and lawyers is outlined below. Financial Management (Salary) £79,545 £65,254 £22,876 Solicitors and Lawyers (Salary) £51,579 £43,469 £16,232

Mean Mode Standard deviation

Explain each of the statistical terms and describe what conclusions you can draw about the comparative salaries of both occupations? (5 marks) 4. Outline the different sampling methods that can be used to draw a representative sample of observations from its...